The precious yellow metal booked its strongest daily gain in more than a week to mark the highest settlement since January as the weakness in the U.S. dollar continues to an intraday low of 90.04 as of writing.
With the upside target of $1,870-75 reached now puts a ‘short-term’ neutral assessment in place.
Markets have been on a roller-coaster ride as concerns about inflation continued to unsettle investors.
The yield on the 10-year Treasury has shot higher this year amid the inflation fears. It was at 1.65% late Monday, up from 1.63% at the end of last week. It began the year close to 0.90%.
The U.S. Federal Reserve is to publish its minutes from its April meeting on Wednesday, which could offer some clues on policymakers’ thinking on inflation.
Viewing the technical assessment, the recent 4-day demand for spot gold has pushed the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator back into overbought territory.
Meanwhile, the Moving Average Convergence Divergence (MACD) supports a positive signal, while the Average Directional Movement Index (ADX) trend indicator is positive (bullish trend).
Although the short-term assessment is neutral, a close above $1,875 should in terms indicate a potential move to $1,900-18. Reassess from there.